MSE Cheap Energy Club - A Con?

NickDug

Hello

So, I'm looking to switch energy supplier and thought I'd use the MSE tool to look for a better deal (it's called the Cheap Energy Club). I had all of the required information to hand about my usage. My current energy tariff was as follows. I give these figures not to be a boring git but to illustrate a point.

Gas 3.39p per kw, 14.5p standing charge per day
Electricity 12.562p per kw, 14.5p standing charge per day.

The MSE switching tool said I could save £280 per year if I switch to Sainsbury's with the following tariff.
Gas 3.192p per kw, 26.01p standing charge per day.
Electricity 10.049p per kw, 26.01p standing charge per day.

Spot the problem? There is almost no difference in the cost per kw for gas and the difference in price for electricity per kw is negligible: 2.5p. In both cases, the daily standing charge is actually higher with Sainsbury's = +12p.

So, how can this possibly translate into a £280 per year saving!? I smelt a rat so I contacted Sainsbury's. On their best quote, I would save only £96 per year - a bit different from £280! And by the time I would have paid to get out of my current contract I'd have been no better off and tied into a new contract with Sainsbury's.

And then I remembered, MSE makes money every time you switch through the site. So there's every incentive to inflate the savings and manipulate the information to make you switch, whether it's really in your interests or not.

I'd love to be proved wrong about this but it looks like a scam to me. Can anyone tell me why I'm wrong? I would really welcome someone from MSE explaining this.

If I'm not wrong, you might want to think about staying away from the MSE Cheap Energy Club. And if they immediately take this post down, you'll know why.

Cheers

Nick.

System

Welcome. It is not a con. The mighty Ofgem requires suppliers to use what it known as the inflated savings methodology which assumes that if you have one month left on your present tariff this will be followed by 11 months on your supplier's standard variable tariff if you do NOTHING. It follows that the projected annual cost for the next 12 months will be MORE than you have paid over the past 12 months - consequently, if you switch, the savings will be inflated.

The only way to check any savings is to compare what you pay today with the projected annual cost for the new tariffs on the comparison site. If you look carefully at the CEC website, they do their best to explain this. Other comparison sites follow the same methodology

https://assets.digital.cabinet-office.gov.uk/media/54da24ebed915d514400000b/The_Energy_Shop_Submission.pdf

pleasehelp39

I used the comparison site for my Gas and Electricity but it showed I made savings with my own supplier on more expensive tariffs. There may be a protocol that comparisons will use the expensive "standard rate" hence the discrepancy but surely something of more assistance to the consumer is possible?

polymaff

pleasehelp39 wrote: »

I used the comparison site for my Gas and Electricity but it showed I made savings with my own supplier on more expensive tariffs. There may be a protocol that comparisons will use the expensive "standard rate" hence the discrepancy but surely something of more assistance to the consumer is possible?

MSE are dragging their heels badly over this. Sometime in the next thousand years they may fulfill their promise to offer both the official and the sensible calculations. In the mean time other sites such as energyhelpline do offer both calculations.

In the mean time, note CEC's calculation of the monthly figure under the heading "Before your fix ends you will pay" and compare that with the "estimated new costs" monthly figure for the "better" accounts they offer you.

MSE_Dan_L

Hi Nick

Hengus is right, this is an Ofgem requirement which we highlight to you in the blue alert section towards the top of your results page.

In this section we breakdown your costs to show how much you pay on your current tariff and how much you'll pay once your tariff expires.

MSE has actually lobbied Ofgem strongly on this point - you might be interested to read our response at this link.
https://forums.moneysavingexpert.com/discussion/5078225

Polymaff - I share your frustration that we've not been able to release the final results page which allows you to make the selection of how your tariff compares. Our techies are working hard on this and we hope to be able to release this month.

Thanks

MSE Dan

polymaff

MSE_Dan_L wrote: »

Polymaff - I share your frustration that we've not been able to release the final results page which allows you to make the selection of how your tariff compares. Our techies are working hard on this and we hope to be able to release this month.

Dan,

I've specified what needs to be implemented in a single sentence (the final sentence of my last post). How difficult can that be to code?

MSE_Dan_L

Hi Polymaff

We did a basic release a few months ago to introduce the blue section, but to provide the full user flexibility around the savings information this isn't so straightforward (I know that it might sound easy, but this does have wide-ranging effects across the site, account pages and our alerts).

We're nearly there now and are just doing all the tests needed to make sure this is working prior to sharing with our members.

System

I wrote to my MP about this problem earlier this year. I got a response back from DECC saying that they agreed with the OFGEM methodology. FWIW, some assumption has to be made about what happens at the end of a switch. As the Govt is pushing people to switch, the save £x00s per annum by switching probably suits the Govt's purposes.

polymaff

Hengus wrote: »

I wrote to my MP about this problem earlier this year. I got a response back from DECC saying that they agreed with the OFGEM methodology. FWIW, some assumption has to be made about what happens at the end of a switch. As the Govt is pushing people to switch, the save £x00s per annum by switching probably suits the Govt's purposes.

Yes, but what happens when the institutional way is not the best - as is so often the case? Simple, the institutions close ranks. They cannot engage reverse, not even to the extent that they might offer the institutional AND the alternative approach - that just isn't how institutions work. Hence OFGEM, DECC etc's response

The same thing applies with the whole concept of switching. Both the government and MSE have committed themselves to and have trumpeted "SWITCH SUPPLIER" - and then expressed their frustration at the low degree of take up. That expression focusses upon everyone except themselves - "lazy, bloody, public" etc.

Wrong, wrong, wrong. In any campaign you have to take people as they come. If disappointingly low numbers switch supplier, don't blame the public, blame your process and open yourself up to the painful realisation that there might be a better process and - shock, horror - it may come from outside your institutions.

[Deleted User]

I used Cheap Energy Club twice in the last 12 months collecting a total of £60 cashback.I ve not heard of any other comp site paying a penny.Also, in my area BG v Sainsburys was nowhere near as close as yours they normally charge the same standing charge of 25p per day for gas and electric for both .Sainsburys have two rates of the same fixed deal, one for low users and the other for average /high and offer a lower standing charge but higher tariff for low users so may appear to be similar to BG s rates.For me MSE is no con, unlike Uswitch etc with their sneaky "tariffs we can switch you to today " con which I believe they ended up getting fined for.

Biggles

Hengus wrote: »

Welcome. It is not a con. The mighty Ofgem requires suppliers to use what it known as the inflated savings methodology which assumes that if you have one month left on your present tariff this will be followed by 11 months on your supplier's standard variable tariff if you do NOTHING. It follows that the projected annual cost for the next 12 months will be MORE than you have paid over the past 12 months - consequently, if you switch, the savings will be inflated.

Which is exactly why it is, really, either a con or lazy web design. Probably both.

Just use http://www.energyhelpline.com/, where you will find a tool, which has been there since last year at least, which will give you the real comparison. Energy Helpline can to it, but CEC says 'Ooh, no, we'd love to but it's an Ofgem requirement that we mislead you'.